The shares of MGIC Investment Corporation (NYSE:MTG) and Under Armour, Inc. (NYSE:UAA) were among the active stocks of the last trading sessions. MGIC Investment Corporation (NYSE:MTG) soared to 2.4% closing at the price of $12.78 whereas the shares of Under Armour, Inc. (NYSE:UAA) soared 0.44% with the increase of 0.1 points closing at the price of $22.98. MGIC Investment Corporation has currently increase 22.18% in its stock over the period of 6-months while its rival Under Armour, Inc. added 22.49% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of MGIC Investment Corporation (NYSE:MTG) is 13.7% while the ROI of Under Armour, Inc. (NYSE:UAA) is 1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MTG’s EBITDA Margin is 4.9 whereas UAA’s is 26.83.
Both the profitability ratios suggest a mixed sentiment for MGIC Investment Corporation (NYSE:MTG) and Under Armour, Inc. (NYSE:UAA).
EPS & Surprise Factor
MGIC Investment Corporation (NYSE:MTG) reported $0.49/share EPS for the previous quarter where analysts were predicting an EPS to be $0.36/share Thus beating the analyst Estimates with a Surprise Factor of 36.1 Percent. While, Under Armour, Inc. (NYSE:UAA) reported EPS of $0.25/share in the last quarter. The analysts projected EPS of $0.12/share depicting a Surprise of 108.3 Percent.
Taking a look at Earnings per Share, Under Armour, Inc. tends to be beating the analyst estimates more than MGIC Investment Corporation. so UAA is more profitable than MTG.
Technical Analysis of MGIC Investment Corporation & Under Armour, Inc.
Moving average convergence divergence (MACD) shows that MGIC Investment Corporation (NYSE:MTG) is on a PRICE RELATIVITY trend While Under Armour, Inc. (NYSE:UAA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the MGIC Investment Corporation was in BULLISH territory and Under Armour, Inc. was in BULLISH territory.
MTG’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While UAA’s candle is BEARISH with HIGH.
EPS Growth Rate: MTG’s 6.54% versus UAA’s 34.06%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of MGIC Investment Corporation (NYSE:MTG) is predicted at 6.54% while Under Armour, Inc. (NYSE:UAA) stands at 34.06%. These numbers suggest that UAA is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of MTG stands at 0 while UAA is at 1.9 whereas the debt ratio of the prior is 0.25 while the debt ratio of the later is 0.41.
The values of the both ratios suggest that UAA is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.1 for MTG and 3.1 for UAA which means MTG has Hold rating whereas UAA has Sell rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for MTG is $15.88 which is 19.52% of its current price while UAA has price target of 20.89 which is -10% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
MTG currently has price to earning P/E ratio of 7.32 whereas UAA has 0 while the forward P/E ratio for the prior stands at 7.93 and for the later it depicts the value of 67.39.
The price to Book P/B for MTG is 1.42, Price to Sale is at 4.24 and for UAA these ratios stand at 10.64 and 1.85.